Get Organized: How to Streamline Health Care Delivery

April 28, 2008

Authors

Our modern health care system has spawned many specialized fields, including "patient advocacy," which offer guidance and even classes on "navigating the health care maze." But it simply shouldn't be so hard for patients to make sure that, for instance, their blood test results reach the right doctor's office in time for their appointment, or their cardiologist knows the names and amounts of the drugs their primary care doctor prescribed.

Much of the problem lies with the fragmentation of our health care system, which drives low-quality, inappropriate, and inefficient care in a country filled with highly skilled health care professionals. Most experts agree: nearly 90 percent of respondents to the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey say we need to fundamentally change the way the health care system is organized. Nine of 10 respondents say strengthened primary care, care management for people with complex conditions, and improved care coordination for all are important strategies for improving delivery.

Models of Organization

Today, most health care is provided through small physician practices. Yet, a Commonwealth Fund literature review published this month by Laura Tollen found growing evidence that the more organized physicians are—for instance, into large group practices or integrated delivery systems—the more likely they are to deliver efficient, high-quality care.

The Geisinger Health System (where Karen Davis is a board member) is an integrated delivery system in Pennsylvania with nearly 700 employed physicians, several hospitals, a health plan, and other clinical services and programs. Geisinger has repeatedly been a health care innovator, implementing electronic medical records across its system, participating in the Medicare physician group practice demonstration, and piloting medical home sites with expanded access to care and a focus on care coordination and chronic disease management. Geisinger also pioneered offering a single price for coronary artery bypass graft surgery, with a "warranty" covering any pre-operative, operative, and post-operative expense incurred up to 90 days after the surgery.

Geisinger's integrated delivery system, along with its financial stability and ability to adjust providers' financial incentives, enables its leadership to take risks and explore such innovative approaches to care.

Denver Health, the largest health care safety net provider in Colorado, is another large and comprehensive integrated health care system. As a Commonwealth Fund case study explains, in 2003 Denver Health adopted the principles of "lean manufacturing" based on Toyota's approach to streamlining its operations and eliminating waste. The leadership also invested in health information technology and hiring practices. As with Geisinger, Denver Health's infrastructure allows the leadership to innovate and offer high-quality care at competitive rates.

An upcoming Commonwealth Fund case study will examine the New York City Health and Hospitals Corporation (HHC), the largest municipal hospital and health care system in the United States. HHC has begun to transform its organizational culture, systems, and care processes by setting up clinical information systems, developing a transparency initiative to promote patient safety, empowering its frontline teams, and more. HHC also employs a number of strategies to ensure the population it cares for has access to appropriate care. One way that HHC has been able to reap the financial rewards of these innovations is, in part, by offering its own Medicaid managed care plans.

Several other models of integrated delivery have been successful, from California's highly integrated and large Kaiser Permanente to the more loosely organized Community Care of North Carolina, which develops local networks of primary care providers for Medicaid enrollees, with per capita payments by the state Medicaid program to cover care coordination and medical home services.

Payment Reform Is Key

Realigned incentives have been key to the success of the quality improvements in each of these integrated delivery systems. Streamlined delivery is much less achievable if you are working within the fee-for-service system, which rewards volume over value. Integrated delivery systems can make strategic decisions to encourage prepayment or bundled payments for services within all of their facilities. For organized physicians who are not part of a fully integrated delivery system, alternative payment choices could include a per-patient fee, for example for providing patients with a medical home, or a per-episode global fee for patients hospitalized for selected procedures. Payment choices for organized hospitals that are not part of a fully integrated system could include a rate based on a patient's diagnosis, with a 90-day warranty to cover readmissions. Learning from such initiatives could lay the foundation for broader application.

Teamwork Valued

Moving toward organized delivery may also require regulatory changes to facilitate integration between hospitals, physicians, and other providers, multidisciplinary care delivery with delegation of selected tasks to a team of health professionals, and accreditation of delivery systems. Such changes should improve quality of care for patients and enhance value for resources invested in health care.

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April 2008

Written with the assistance of Christine Haran

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The mission of The Commonwealth Fund is to promote a high-performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society's most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.